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Twitter CEO's Unexpected Advice on Preserving Startup Culture in Your Company

87 points by smalter 13y ago

mathattack 13y ago
This is obvious, but sometimes tough on employees. At a prior employer I watched how early employees felt that things had become too impersonal when they had to start recording their time and submitting expense reports. But the reality is the company was suffering from under-management as the founders couldn't keep a grip on the firm with their informal management style. They were smart enough to change some of the culture to enable the company to keep growing. From an employee's point of view, it's tough, but if you're happiest at a 20-50 person firm, it's best to move on (at least after vesting) when the company gets too big.
- arethuza 13y ago
  I've never worked anywhere where I had to do time recording - but even in a 2 person startup I've always done "formal" expense claims to avoid the potential wrath of tax authorities.
- bane 13y ago
  I'd say that the moment you start doing time keeping is the moment the startup culture days are over. It's like a mental switch for everybody in the company. Everybody feels it and there's simply no going back. It's like puberty, painful, but inevitable, and leads to more maturity later.
  - Wilya 13y ago
    I'm curious about what's so wrong about time keeping. I've seen startups that did some time keeping (though not in a very tight way, more in just keeping track of who did what on a half-day basis), some that didn't keep any, and I can't see much of a difference in the culture or how it's a bad thing. I don't see how it's useful, but it's never been a red flag to me by itself. Is it because of the formal process that comes with it, because of the way it's usually done at bigco, or do some people feel annoyed about having to always count their time ?
    - DanBC 13y ago
      > Is it because of the formal process that comes with it, because of the way it's usually done at bigco, or do some people feel annoyed about having to always count their time ? Some people must account for all of their time in 15 minute blocks. It's frustrating because either you do it properly, and have people complaining about the amount of time you spend doing the paperwork; or you fudge it, in which case whyTF do they specify it to 15 minutes why don't they just let you give a broad outline of what you've done? BigCo can be really weird.
    - mathattack 13y ago
      My sense is people generally separate their work into, "Tasks I like to do" and "Administrative overhead". For small companies, being nimble is more important than scale or coordination, so the overhead takes a back seat. To use Lean Startup lingo, until you have product-market fit, scale and coordination isn't a concern. Once you have product-market fit, then coordination and scale matters. Understanding how people are spending their time is important for service companies to understand billing, and product companies to understand if people are working on the right priorities. It also helps estimation. I've seen very talented people that are loath to enter time reports. I've seen companies lose money because talented expensive consultants didn't bother getting it in on time. My suspicion is there are a subset of people who just don't want to be bothered. The best seats for them are small non-consulting firms that are focused more on market response than scaling or coordinating. It's not a judgment call, it's more about going where their mentality fits best. (It took me a long time to realize this in my own career)
    - bane 13y ago
      I agree with the other comments responding to your question. I don't think time-keeping is itself a bad thing, or that the things that happen to a company once they start keeping track of time is a bad thing, but it's definitely painful to go through the transition. Time keeping ends up being more important in some kinds of companies than others, but all growing companies end up doing it in some way eventually. For example, Google finally started keeping accurate track of what different services were actually costing them to keep running and the result has been pretty painful for lots of people who use Google products and services. Some example, GAE hosting prices jumped thousands of percent overnight, Google Maps API became so expensive that numerous companies built around it shuttered or moved to other technologies completely, Translate API was shuttered etc. In aggregate Google was making loads of money, despite having huge money losing parts of the company...and those weren't acting as traditional loss leaders either (meaning they lose a little money in one place to bring customers in to make more money in total). In a B2B company, you often end up with contracts to manage, and contracts usually have strict labor hours that have to be accounted for. Even if the contract itself doesn't specify the hours (some kind of firm fixed price deal), you still have to internally manage hours to make sure that you're making money on the contract instead of losing it to salaries. The only way to really do that is time keeping. In most early stage companies, the ones that are still building their products and have lots of investment money to work with and no particular contracts or anything to worry about, the assumption is that they're going to lose money for a while anyways, so there's not a lot of reason to keep track of it. And even as they grow, so long as money coming in is more than money going out things look pretty good. But eventually somebody will want to squeeze a bit more efficiency out of the company, and time-keeping is the signal that that is happening. It means the end of the loose structure you had been working in and the introduction of metric tracking. With time-keeping comes head counting, more rigid delivery dates, more rigid tracking of every aspect of the business process. It's like a switch gets flipped and the organization suddenly becomes a regular old company. Which is fine. It usually also means more job stability. But you usually see lots of flight out of the company as people move on to a less rigid environment. And the introduction of very stable personality types who don't mind being a development drone. The culture just...changes.
thenomad 13y ago
The second half of the article is arguably more interesting than the first: it covers Zappos' CEO's idea for increasing productivity with large numbers of employees. I'll be very interested to see if his "city" experiment works.
- taeric 13y ago
  Agreed. Makes some intuitive sense. If we knew exactly what made things work, it would make sense to pick that environment. Since we clearly don't, it seems most of the limiting actions we take actually reduce the chances of finding that random walk that leads to success.
- krmmalik 13y ago
  Agreed. I'd love to read more about the Zappos case study. I'd love to see how they've solved some of the finer challenges of attempting a work environment like this. I can definitely see why it would work though.
- chiph 13y ago
  I've worked at firms in suburban office parks, and I've worked at firms in downtown urban areas. I like the latter more, simply because you can walk to lunch and interact with people (sometimes they're the homeless, which is how I learned about Blue Leapers being a global threat to mankind...) With the suburban offices, either I'm bringing my lunch, or I'm driving somewhere to go eat. In both cases I'm in a sensory bubble, and that's bad. So I think Tony's idea has a lot of validity.
  - wtvanhest 13y ago
    Even more than that, every person I know who in their 20s and 30s would prefer to work in the city and either do a quick commute in via public transportation or live in the city. No one wants to have to get in a car and drive for 40 minutes. If they do, they justify it due to cost, not actual benefit. The companies that get the best people are the one's located in downtown. That alone increases productivity.
dbough 13y ago
The company I work for has been going through the metamorphosis of startup to medium sized over the last few years. I firmly believe that there needs to be more structure (policies, procedures, documentation) as you get bigger and add employees. If those are lacking, you'll get a lot of uninformed employees making poor decisions and a product that looks and feels disjointed.
bicx 13y ago
The whole idea of bringing people together for more interaction can easily be abused. As a dev at a startup, we just sit at a big table (well, technically 6 desks pushed together). While we have had some great discussions that improved our workflow and even the direction of the company, we also had many, many discussions about football, Verge articles, and Youtube videos. Being motivated, (generally) hard-working developers, we actually got a bit frustrated with how easy it was to interact with each other. A few months ago, we let go of most of our scheduling structure, and now we have virtually no obligation to be in the office if we don't want to. Now we just work from home if we absolutely need a highly productive day. I like the structure we've come up with (plus we distract each other a lot less these days), and we are much more productive. There's a balance to be struck, and encouraging interaction can have unintended side effects if you aren't careful.
- jbattle 13y ago
  We had a similar problem here. I was frustrated when people felt like they had to stay home to get work done. We set aside one of the meeting rooms as a quiet work room (with monitors/keyboards/mice). Gives another option for getting away from the noise to focus but you are still close enough for collaboration when you want/need it.
- jusben1369 13y ago
  I think I saw a wonderful quote around you're more productive on your own and more creative/innovate as a group. So as you say balance is the trick.
ChikkaChiChi 13y ago
Being a CEO requires you to sell two products: What your company offers, and what you offer those that produce those offerings. Achieving greatness can only come with an obsessive self-awareness to always be trying to improve both.
jusben1369 13y ago
I was employee 40 at a startup that went to 400. I think Dick's advice is right. The hardest part is losing many of the early employees once you hit about 150. But the bigger problem would be trying to keep them. You need different skill sets and different people for different stages. It hurts though. (also agree that the Zappos piece was much more interesting to me - but Vegas?! It's tough to go outside 3 months of the year after 9am)
TheCowboy 13y ago
A couple people mentioned wanting to read more on Tsieh's Downtown Project. This colorful piece was posted on HN over the summer: http://news.ycombinator.com/item?id=5895699 http://news.ycombinator.com/item?id=5895699 When reading I'd recommend considering that some time has passed, so maybe things have improved on the Zappos/Hsieh side.
jtbigwoo 13y ago
I feel like there are four stages of company development that need distinct sets of people. 1. Pioneers who can survive and search for a successful direction. 2. Generalists who can take that direction and establish a foundation. 3. Specialists who can take that foundation and build something that can succeed on a large scale. (I don't like the Specialist label, but I couldn't think of a better one.) 4. Optimizers who can grow and refine a large-scale business. Many companies (Microsoft, for example) make the mistake of promoting themselves as a stage 1 or 2 company when they function like a stage 3 or 4 company. They keep looking for Pioneers who are going to be unhappy and quit after a year when what they really need are Optimizers. It's not that later-stage companies can't benefit from having and keeping Generalists, it's just that the company is too large to be doing the things that Generalists enjoy. They don't need somebody who can build a server one day and code a new contact page the next. They need somebody who will spend six months working on a project that makes a certain kind of transaction 10% faster.
- mathattack 13y ago
  I'd add a 5th. "Maxing the value of a mature or declining business." Many companies overinvest on #4, when the business has moved to step 5. IBM played this very well. Blackberry, perhaps not so well.
  - jtbigwoo 13y ago
    Good point! Just because a business isn't growing doesn't mean it needs to shut down immediately. There are still companies that make buggy whips.
  - wtvanhest 13y ago
    I'd argue that what IBM did well was build a consultancy business. That is where a lot of their growth came from over the past 5 years. Their core business is being used as a cash cow and brand for their new business.
    - mathattack 13y ago
      True. I view the move to services as a way of monetizing the brand. Historically their HW and SW weren't always the best, but people knew you could call their support with a problem. Now they've found a way to get paid for the support as demand for their big iron shrank. They've done a lot of acquisitions too, but not wasteful ones. They still do share buybacks every year, which suggests they know their place as a shrinking company, so they invest profits in shrinking the amount of outstanding shares. You know something is up when Warren Buffett is investing in them. :-) Compare this to other mature tech companies who blow away all the shareholder wealth once the growth stops.

87 points by smalter 13y ago

This is obvious, but sometimes tough on employees. At a prior employer I watched how early employees felt that things had become too impersonal when they had to start recording their time and submitting expense reports. But the reality is the company was suffering from under-management as the founders couldn't keep a grip on the firm with their informal management style. They were smart enough to change some of the culture to enable the company to keep growing. From an employee's point of view, it's tough, but if you're happiest at a 20-50 person firm, it's best to move on (at least after vesting) when the company gets too big.

arethuza 13y ago
I've never worked anywhere where I had to do time recording - but even in a 2 person startup I've always done "formal" expense claims to avoid the potential wrath of tax authorities.
bane 13y ago
I'd say that the moment you start doing time keeping is the moment the startup culture days are over. It's like a mental switch for everybody in the company. Everybody feels it and there's simply no going back. It's like puberty, painful, but inevitable, and leads to more maturity later.
- Wilya 13y ago
  I'm curious about what's so wrong about time keeping. I've seen startups that did some time keeping (though not in a very tight way, more in just keeping track of who did what on a half-day basis), some that didn't keep any, and I can't see much of a difference in the culture or how it's a bad thing. I don't see how it's useful, but it's never been a red flag to me by itself. Is it because of the formal process that comes with it, because of the way it's usually done at bigco, or do some people feel annoyed about having to always count their time ?
  - DanBC 13y ago
    > Is it because of the formal process that comes with it, because of the way it's usually done at bigco, or do some people feel annoyed about having to always count their time ? Some people must account for all of their time in 15 minute blocks. It's frustrating because either you do it properly, and have people complaining about the amount of time you spend doing the paperwork; or you fudge it, in which case whyTF do they specify it to 15 minutes why don't they just let you give a broad outline of what you've done? BigCo can be really weird.
  - mathattack 13y ago
    My sense is people generally separate their work into, "Tasks I like to do" and "Administrative overhead". For small companies, being nimble is more important than scale or coordination, so the overhead takes a back seat. To use Lean Startup lingo, until you have product-market fit, scale and coordination isn't a concern. Once you have product-market fit, then coordination and scale matters. Understanding how people are spending their time is important for service companies to understand billing, and product companies to understand if people are working on the right priorities. It also helps estimation. I've seen very talented people that are loath to enter time reports. I've seen companies lose money because talented expensive consultants didn't bother getting it in on time. My suspicion is there are a subset of people who just don't want to be bothered. The best seats for them are small non-consulting firms that are focused more on market response than scaling or coordinating. It's not a judgment call, it's more about going where their mentality fits best. (It took me a long time to realize this in my own career)
  - bane 13y ago
    I agree with the other comments responding to your question. I don't think time-keeping is itself a bad thing, or that the things that happen to a company once they start keeping track of time is a bad thing, but it's definitely painful to go through the transition. Time keeping ends up being more important in some kinds of companies than others, but all growing companies end up doing it in some way eventually. For example, Google finally started keeping accurate track of what different services were actually costing them to keep running and the result has been pretty painful for lots of people who use Google products and services. Some example, GAE hosting prices jumped thousands of percent overnight, Google Maps API became so expensive that numerous companies built around it shuttered or moved to other technologies completely, Translate API was shuttered etc. In aggregate Google was making loads of money, despite having huge money losing parts of the company...and those weren't acting as traditional loss leaders either (meaning they lose a little money in one place to bring customers in to make more money in total). In a B2B company, you often end up with contracts to manage, and contracts usually have strict labor hours that have to be accounted for. Even if the contract itself doesn't specify the hours (some kind of firm fixed price deal), you still have to internally manage hours to make sure that you're making money on the contract instead of losing it to salaries. The only way to really do that is time keeping. In most early stage companies, the ones that are still building their products and have lots of investment money to work with and no particular contracts or anything to worry about, the assumption is that they're going to lose money for a while anyways, so there's not a lot of reason to keep track of it. And even as they grow, so long as money coming in is more than money going out things look pretty good. But eventually somebody will want to squeeze a bit more efficiency out of the company, and time-keeping is the signal that that is happening. It means the end of the loose structure you had been working in and the introduction of metric tracking. With time-keeping comes head counting, more rigid delivery dates, more rigid tracking of every aspect of the business process. It's like a switch gets flipped and the organization suddenly becomes a regular old company. Which is fine. It usually also means more job stability. But you usually see lots of flight out of the company as people move on to a less rigid environment. And the introduction of very stable personality types who don't mind being a development drone. The culture just...changes.

thenomad 13y ago

The second half of the article is arguably more interesting than the first: it covers Zappos' CEO's idea for increasing productivity with large numbers of employees. I'll be very interested to see if his "city" experiment works.

taeric 13y ago
Agreed. Makes some intuitive sense. If we knew exactly what made things work, it would make sense to pick that environment. Since we clearly don't, it seems most of the limiting actions we take actually reduce the chances of finding that random walk that leads to success.
krmmalik 13y ago
Agreed. I'd love to read more about the Zappos case study. I'd love to see how they've solved some of the finer challenges of attempting a work environment like this. I can definitely see why it would work though.
chiph 13y ago
I've worked at firms in suburban office parks, and I've worked at firms in downtown urban areas. I like the latter more, simply because you can walk to lunch and interact with people (sometimes they're the homeless, which is how I learned about Blue Leapers being a global threat to mankind...) With the suburban offices, either I'm bringing my lunch, or I'm driving somewhere to go eat. In both cases I'm in a sensory bubble, and that's bad. So I think Tony's idea has a lot of validity.
- wtvanhest 13y ago
  Even more than that, every person I know who in their 20s and 30s would prefer to work in the city and either do a quick commute in via public transportation or live in the city. No one wants to have to get in a car and drive for 40 minutes. If they do, they justify it due to cost, not actual benefit. The companies that get the best people are the one's located in downtown. That alone increases productivity.

dbough 13y ago

The company I work for has been going through the metamorphosis of startup to medium sized over the last few years. I firmly believe that there needs to be more structure (policies, procedures, documentation) as you get bigger and add employees. If those are lacking, you'll get a lot of uninformed employees making poor decisions and a product that looks and feels disjointed.

bicx 13y ago

The whole idea of bringing people together for more interaction can easily be abused. As a dev at a startup, we just sit at a big table (well, technically 6 desks pushed together). While we have had some great discussions that improved our workflow and even the direction of the company, we also had many, many discussions about football, Verge articles, and Youtube videos. Being motivated, (generally) hard-working developers, we actually got a bit frustrated with how easy it was to interact with each other. A few months ago, we let go of most of our scheduling structure, and now we have virtually no obligation to be in the office if we don't want to. Now we just work from home if we absolutely need a highly productive day. I like the structure we've come up with (plus we distract each other a lot less these days), and we are much more productive. There's a balance to be struck, and encouraging interaction can have unintended side effects if you aren't careful.

jbattle 13y ago
We had a similar problem here. I was frustrated when people felt like they had to stay home to get work done. We set aside one of the meeting rooms as a quiet work room (with monitors/keyboards/mice). Gives another option for getting away from the noise to focus but you are still close enough for collaboration when you want/need it.
jusben1369 13y ago
I think I saw a wonderful quote around you're more productive on your own and more creative/innovate as a group. So as you say balance is the trick.

ChikkaChiChi 13y ago

Being a CEO requires you to sell two products: What your company offers, and what you offer those that produce those offerings. Achieving greatness can only come with an obsessive self-awareness to always be trying to improve both.

jusben1369 13y ago

I was employee 40 at a startup that went to 400. I think Dick's advice is right. The hardest part is losing many of the early employees once you hit about 150. But the bigger problem would be trying to keep them. You need different skill sets and different people for different stages. It hurts though. (also agree that the Zappos piece was much more interesting to me - but Vegas?! It's tough to go outside 3 months of the year after 9am)

TheCowboy 13y ago

A couple people mentioned wanting to read more on Tsieh's Downtown Project. This colorful piece was posted on HN over the summer: http://news.ycombinator.com/item?id=5895699 http://news.ycombinator.com/item?id=5895699 When reading I'd recommend considering that some time has passed, so maybe things have improved on the Zappos/Hsieh side.

jtbigwoo 13y ago

I feel like there are four stages of company development that need distinct sets of people. 1. Pioneers who can survive and search for a successful direction. 2. Generalists who can take that direction and establish a foundation. 3. Specialists who can take that foundation and build something that can succeed on a large scale. (I don't like the Specialist label, but I couldn't think of a better one.) 4. Optimizers who can grow and refine a large-scale business. Many companies (Microsoft, for example) make the mistake of promoting themselves as a stage 1 or 2 company when they function like a stage 3 or 4 company. They keep looking for Pioneers who are going to be unhappy and quit after a year when what they really need are Optimizers. It's not that later-stage companies can't benefit from having and keeping Generalists, it's just that the company is too large to be doing the things that Generalists enjoy. They don't need somebody who can build a server one day and code a new contact page the next. They need somebody who will spend six months working on a project that makes a certain kind of transaction 10% faster.

mathattack 13y ago
I'd add a 5th. "Maxing the value of a mature or declining business." Many companies overinvest on #4, when the business has moved to step 5. IBM played this very well. Blackberry, perhaps not so well.
- jtbigwoo 13y ago
  Good point! Just because a business isn't growing doesn't mean it needs to shut down immediately. There are still companies that make buggy whips.
- wtvanhest 13y ago
  I'd argue that what IBM did well was build a consultancy business. That is where a lot of their growth came from over the past 5 years. Their core business is being used as a cash cow and brand for their new business.
  - mathattack 13y ago
    True. I view the move to services as a way of monetizing the brand. Historically their HW and SW weren't always the best, but people knew you could call their support with a problem. Now they've found a way to get paid for the support as demand for their big iron shrank. They've done a lot of acquisitions too, but not wasteful ones. They still do share buybacks every year, which suggests they know their place as a shrinking company, so they invest profits in shrinking the amount of outstanding shares. You know something is up when Warren Buffett is investing in them. :-) Compare this to other mature tech companies who blow away all the shareholder wealth once the growth stops.